![]() Where there is no clear explanation, particularly if there are other warning signs, you should ask questions such as: In challenging economic times and a fast-paced global economy, transactions can fall through and your client's instructions may change without warning.Īsk yourself whether there's a reasonable explanation for any changes to the retainer, for example the company goes bankrupt or a couple buying a home decide to divorce. If you have a third-party funder, you should consider the risk of money laundering and whether you should conduct any checks on them and the source of funds. have the funds come from someone else because your client is on the sanctions list and cannot access a bank account of their own?.how can the third party afford to provide this money?.is it a gift or a loan, and if so, what practical or legal consequences are there?.You should consider why the funds are coming from the third party: However, it can also be a way to layer criminal property. Third-party funding is a normal feature of many conveyancing transactions and other retainers. does the information make me suspect there is criminal property involved?.is this consistent with what I know about the client?.In these situations, you should ask yourself: For example, a bank statement showing a large withdrawal might not refer to the cash you’re trying to identify.Įqually, a bank statement showing a large cash deposit does not provide you with information about its origin. Where cash is involved, identifying the source of funds becomes more challenging. documents confirming the source, such as a sale of a house or shares.You may even ask for documentary evidence to support their account, for example: You should consider how the client is able to have this amount of private funding and whether it’s consistent with what you know about them. Large amounts of cash or private funding, even if held in a bank account, may be a warning sign of money laundering. Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) requires you to scrutinise transactions to make sure that they’re consistent with your knowledge of the client. ![]() This may not be enough to give rise to a suspicion of money laundering, but it’s a warning sign that needs to be followed up. the type of retainer they’re undertaking.your understanding of a client in their position.If a client refuses to answer questions or give you information about themselves, you should consider whether this is suspicious.įind out more about customer due diligence Unusual transactionsĬlients trying to launder funds will often try to carry out unusual transactions. Your practice should have customer due diligence (CDD) procedures in place to identify clients. Why are foreign nationals, who are overseas residents, instructing your firm when you have no connection or profile within that country? Why is a client instructing you in a field or type of work you have not practised in before? Why is a client who lives far from your firm contacting you in relation to a retainer which has no geographic connection to your firm? To help assess the risk posed by new clients, you should try to understand why they chose your firm. It’s important that you make fully informed and risk-based decisions on new clients and new types of business from both new and existing clients. Despite criminals continually adapting to changing markets and opportunities, there are signs to look for which can alert you to possible money laundering.
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